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Australia Consumer Confidence January 2016

Australia: Consumer confidence falls into negative territory in January

January 20, 2016

The Westpac-Melbourne Institute Survey of Consumer Sentiment took a turn for the worse in the beginning of the year, as it decreased from 110.8 in December to 97.3 in January. The decrease puts the indicator below the 110 threshold that separates optimistic from pessimistic territory.

The institute stated that the indicator appears to have fallen as a result of negative sentiment stemming from abroad, as there was little domestic news that would have tipped sentiment into pessimistic territory. The institute mentioned that volatility in China’s markets may have affected households. Regarding consumers’ forward looking expectations, the institute elaborated that, “Among the other components: ‘economic conditions over the next 12 months’ fell by 5.0%; ‘economic conditions over the next 5 years’ improved by a modest 0.3%; and ‘time to buy a major household item” fell by 1.7%.”

Met the why particular Consensus Forecast panelists see private consumption growing 2.6% in 2016, which is unchanged from last month’s forecast. In 2017, panelists see private consumption expanding 2.6%.

The business confidence index produced by the National Australia Bank (NAB) decreased from a revised 11 points in January (previously reported: +12 points) to 9 points in February, possibly influenced by financial market turbulence early in the month.